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Property

Proptech more prominent in residential and office

Released at: 12:15, 26/07/2019

Proptech more prominent in residential and office

Photo: JLL Vietnam

Two segments served by more than 50% of proptech players in the market, according to new JLL report.

by Ngoc Lan

The development of proptech (property technology) in Vietnam is more prominent in the active market segments of residential and office, according to a JLL report released on July 25.

These two sectors witness high levels of interest from both developers and buyers and are served by more than 50 per cent of proptech players in the market.

The report included data from Finrei’s list of Vietnam’s proptech ecosystem, the most notable segments being related to the residential market in listing and marketplaces, tech-enabled brokerage, leasing, and renting and property management.

The second-most active proptech segment is in co-working space, which is now strongly growing in line with the booming office market in Vietnam. As more companies embrace flexible workspaces, smart technology has a major role to play in helping landlords and companies understand - and optimize - how various spaces are being used. All signs point to growth in the smart building market, with almost all new builds involving at least one aspect of smart technology such as smart lighting or heating.

Proptech segments also directly serve the residential and office sectors, to serve related industries such as hotels, property analysis, construction, and fund raising.

Furthermore, proptech companies in Vietnam have started to collaborate with fintech players. JLL expects the residential sector, given the level of investment and consumer engagement, to be the first to connect proptech and fintech. For example, property management companies are trying to connect and embed e-wallet into their property management apps in order to improve services and experience for their users. Real estate listing websites have announced collaborations with e-wallet providers for easier collection of service fees from users. However, as Vietnam is still predominantly a cash economy and credit card penetration is still low, this integration may take some time.

Despite inherent barriers arising from a traditional mindset and the high requirement for trust in the real estate industry, the prospects for proptech in Vietnam are still positive, in JLL’s view, due to Vietnam’s young demographics, tech-savvy population, and available funding and incentives for tech startups.

Ms. Trang Bui, Head of Markets at JLL Vietnam, said proptech in Vietnam is developing and expanding on the back of strong momentum in Vietnam’s real estate market, due to its benefits in improving accuracy and speed, cost savings, and convenience.

According to JLL Vietnam, more support from the government is needed to foster the startup culture, making it easier for companies to enter the smart tech market. As more competition enters the market, prices will decrease and proptech will become more accessible. In the future, for the growth of proptech, there is a need for wider and better-quality network connectivity in the country.

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